High water usage can be a huge waste of natural resources and a big loss to cash-flow at your multifamily investment property.
When you do receive a high water bill it can be challenging to trace down the source of the issue. Multiple apartment units means multiple sinks, showers, toilets and even washing machines. Pro tip - it's usually a toilet - but how do you know which one? If you do fix an issue, you may need to wait till the next water bill arrives before you confirm that it was the only issue. Having multiple months of high water bills is not fun!
One solution that I have found is to install sub-meters for each apartment unit. Now this isn't feasible for every type of building. Many properties have their water lines run together to multiple units and this solution wouldn't work for them.
However, I have found 2 buildings in my portfolio (a triplex and a fourplex) where the supply lines were sufficiently separated that this did work. I hired a plumber to do a little bit of re-piping - and once complete, I am now able to tell exactly which unit is using what amount of water.
Not only does this help to quickly identify which apartment is throwing money down the drain - but it also presents the opportunity to bill each resident for their specific use.
Once a resident is responsible for their water bill, they suddenly care about how much water they are using. Instead of high usage being the landlord's problem to worry about - with sub-metered water, suddenly the resident has some skin in the game.
If it isn't feasible to sub-meter your apartment building, an alternative is to implement a RUBS (Ratio Utility Billing System) program. This is where you divide up the total water bill (either by square footage or by occupancy) and charge each resident accordingly. This doesn't solve the leak identification issue - but it does help with resident engagement and with increased cash-flow.
Utilities can be a huge part of your operating expenses. Naturally, when you offset this expense to the people that are using the resource it makes a big dent in your bottom line.
Be sure to check with your local and state regulations that may impact your ability to implement this strategy.
Pictured here is a snap-shot of recent usage. We've got one unit that is way out of line with it's water usage. Thankfully this is not going to take months to figure out.
Have you implemented a RUBS system at your apartment building?
Have you installed sub-meters?
How hard is it for you to identify the source of a high water bill?
What other strategies have you implemented to improve your apartment's bottom line?
